PRESIDENT CLINTON CHALLENGES THE CONGRESS TO ACT NOW ON
THE NATION'S HEALTH CARE PRIORITIES

Today, the President will challenge the Congress to place the nation's
health care interests ahead of special interests by providing an
affordable Medicare prescription drug benefit and holding tobacco
companies accountable for the cost of smoking related illnesses. The
President will express his disappointment with the House Ways and Means
Committee straight party line vote for a prescription drug benefit that
would be neither affordable nor meaningful for the nation's seniors and
people with disabilities served by Medicare. He will urge the full
House to reject this partisan committee vote and work towards a
bipartisan agreement on a Medicare prescription drug benefit that is
affordable, available, and optional for all Medicare beneficiaries. The
President will also commend the House of Representatives for its
bipartisan decision on Tuesday to adopt the Waxman amendment, allowing
the Department of Veterans Affairs to help finance the Department of
Justice (DOJ) tobacco litigation. He will urge the House to take the
next step and adopt an amendment permitting DOJ to accept this funding
so they can proceed with the litigation, which could provide billions of
dollars to improve the medical care of not only veterans, but all
Americans.

HOUSE WAYS AND MEANS REPUBLICANS PASS SEVERELY FLAWED PRESCRIPTION DRUG
BENEFIT. Last night, the House Ways and Means Committee, on a straight
party-line vote, passed out a private insurance drug benefit that the
insurance industry itself has consistently stated won't work. They
voted against every Democratic amendment designed to strengthen the
benefit and ensure that all Medicare beneficiaries would have access to
an affordable prescription drug benefit. When the Republicans had the
opportunity to support a true Medicare benefit that would be available
to all beneficiaries, each and every one of them voted against it.
Clearly, the legislation supported by Committee Republicans serves the
pharmaceutical industry's interests much more than those of the senior
citizens and people with disabilities it purports to help. This is why
virtually every organization representing older Americans and people
with disabilities have strongly rejected the House Republican policy.

REPUBLICAN POLICY DOES NOT MEET THE RHETORIC OF ITS PROPONENTS. Although
the House Republican leadership has finally recognized the need for an
affordable, optional prescription drug benefit available to all Medicare
beneficiaries, the President will note that their policy does not
achieve their stated goals. The Republican policy:

Fails to assure the availability or stability of drug coverage
options. The Republican plan builds on the already-flawed private
Medigap insurance market rather than adding a prescription drug benefit
to Medicare. The insurance industry itself claims that an insurance
model will not work for prescription drug coverage and that insurers
will not voluntarily participate. Even if some insurers do offer
coverage, they would likely come in and out of the market, move to
profitable market areas, and significantly modify their benefit design
from year to year based on prior year's experience. This would result
in the same pull-outs and uncertainty that we see in managed care today.

Provides a private insurance "not a Medicare" benefit.
Outpatient prescription drugs would not be part of the Medicare benefits
package like doctor or hospital care. Beneficiaries would pay expensive
premiums to private Medigap plans rather than to Medicare for an
affordable option.

Fails to ensure the affordability of coverage options. Under the
Republican plan, it appears that Medicare would not provide a single
dollar of direct premium assistance for middle-class Medicare
beneficiaries (any senior with income above $12,600). Instead, it
relies on a flawed "trickle-down theory" that would end up subsidizing
insurers, not seniors. The Republican proposal appears to subsidize
insurers for part of the cost for the most expensive enrollees, hoping
that this will result in lower premiums for all enrollees. There are no
assurances that seniors will see lower premiums as a result. Even if an
insurer passed through every dollar of its subsidy, premiums would still
be too expensive for many seniors.

Does not guarantee a meaningful benefit. The Republican plan
appears to specify only the stop-loss amount. Private insurers could
define deductibles, copayments and benefit limits, promoting competition
on confusion rather than price and quality. In addition, relying on an
insurance model where insurers get paid one premium for all enrollees --
no matter how sick -- and can define the drug benefit puts sicker seniors
and people with disabilities at risk of adverse selection. An insurer
could discourage seniors with high drug costs from enrolling by offering
no deductible, low copayments and a low benefit cap that leaves a large
gap before the stop-loss kicks in.

Limits choice of drugs and pharmacies. The so-called "choice"
model offered by the Republicans appears to break up the pooled
purchasing power of seniors, forcing insurers to reduce prices through
restrictive formularies and limited choice of pharmacies. While there
may be a limited appeals process available to them, beneficiaries are
not guaranteed access to off-formulary drugs that their doctor certifies
are medically necessary.

REPUBLICANS REJECT NEEDED HEALTH CARE PROVIDER RESTORATIONS. Last night,
the Republicans unilaterally rejected the President's proposed
investment of $21 billion over five years ($40 billion over 10 years)
for a Medicare and Medicaid health care provider payment restoration
initiative designed to ensure adequate reimbursement to hospitals, rural
providers, teaching facilities, nursing homes, home health care
agencies, managed care plans, and other providers. It provides $9
billion over 5 years ($19 billion over 10 years) for specific policies
that mainly stop payment reductions scheduled to take place on October
1, 2000 and provides $11 billion over 5 years ($21 billion over 10) in
unspecified funding to be used in developing additional targeted and /
or permanent policy modifications for provider reimbursement. The
proposal is designed to continue access to high-quality care, and
clearly illustrates that adequate financing for provider payments need
not conflict with necessary funding for a long-overdue and voluntary
Medicare prescription drug benefit.

PRESIDENT URGES THE CONGRESS TO WORK ON A BIPARTISAN BASIS. The
President will urge the House leadership to change their proposal to
ensure that it is: voluntary; accessible to all beneficiaries; designed
to provide meaningful protection and bargaining power for seniors;
affordable for all beneficiaries and for the program; and administered
using competitive purchasing techniques. In so doing, he will
underscore that there is still time left to do both a voluntary
prescription drug benefit and provider payment restoration in the
context of broader reforms that extend the life of the Medicare trust
fund beyond 2030.

PRESIDENT URGES CONGRESS TO LOOK OUT FOR THE PUBLIC INTEREST, NOT THE
SPECIAL INTEREST OF BIG TOBACCO . This week, the House of
Representatives took an important step toward protecting the health of
all Americans by putting the people's interests before special interests
and passing an amendment on the VA/HUD Appropriations bill allowing the
Department of Veterans Affairs to devote a small portion of its funding
to help finance the Justice Department litigation against tobacco
companies. This litigation would recover billions of dollars in
tobacco-related health care costs and finally make the tobacco industry
answer to the taxpayers in court for their actions. However, this
bipartisan victory was only the first step. The 2001 Commerce State
Justice Appropriations bill, as reported by committee, would prohibit
the Justice Department from accepting any transferred funds except in
cases of defensive litigation. Today, the President will urge Congress
to continue the task they have begun by adopting an amendment, expected
to be offered by Representative Waxman and others, permitting the
Justice Department to accept transferred funds (including those from the
DVA) for tobacco litigation and other narrowly defined purposes. The
President will reiterate his call on Congress to make the health of our
children a priority and to reject the interests of big tobacco so that
justice can run its course -- the legal responsibility of the tobacco
companies should be decided by the judicial process, not the political
process.

THE DEADLY INFLUENCE OF TOBACCO. Both the President and Vice President
have worked hard since taking office to protect our nation's children
from the dangers of tobacco. Each year, more than 400,000 Americans are
killed by tobacco-related diseases. The cost to the federal government
is staggeringly large, and includes more than $20 billion in federal
payments under Medicare and other programs. Each year, the Department
of Veterans Affairs spends more than $1 billion alone on smoking related
illnesses. Children have been particularly targeted by tobacco media
campaigns. Nearly 4 million children under the age of 18 smoke
cigarettes -- every day more than 6,000 try their first cigarette, 3,000
become regular smokers, and 1,000 will have their lives cut short as a
result. We can and must work across party lines to preserve the health
of our nation and the lives of our children. The President will assert
that failure to pass the Waxman amendment on the CJS Appropriations bill
would be wholly inconsistent with Tuesday's bipartisan vote and
represent the worst example of catering to special interests.